Luna Capital Management LLC

Fees and Compensation

The following types of fees will be assessed:

Asset Management & Pension Consulting – Fees are charged quarterly in arrears and are based
primarily on asset size and the level of complexity of the services provided. In individual cases,
LCM has the sole discretion to negotiate fees that are lower than the standard fee shown or to
waive fees. Fees are not based on the share of capital gains or capital appreciation of the funds
or any portion of the funds. Lower fees for comparable services may be available from other
sources. Fees for the initial quarter will be prorated based upon the number of calendar days in the
calendar quarter that the advisory agreement is in effect. Fees are based on the market value of the
assets on the last business day of the quarter. Annual fees range from 1.00% - 1.75%, depending

on the amount of assets under management (“AUM”) – See chart below. Consulting services are
included in these fees for asset management services. Clients can combine multiple household
accounts to receive a lower tiered schedule fee.

Fee Schedule for Asset Management:

  Total Account Value                                 Maximum Annual Advisory Fee
 Under $100,000                                               2.00%
 $100,001 – $500,000                                          1.75%
 $500,001 - $1,000,000                                        1.50%
 $1,000,001 or more                                           1.00%

As authorized in the client agreement, the account custodian withdraws Luna Capital
Management, LLC’s advisory fees directly from the clients’ accounts according to the
custodian’s policies, practices, and procedures. The custodial statement includes the amount of
any fees paid to LCM for advisory services. You should carefully review the statement from
your custodian/broker-dealer’s statement and verify the calculation of fees. Your
custodian/broker-dealer does not verify the accuracy of fee calculations.

Fees are charged in arrears on a quarterly basis, meaning that advisory fees for a quarter are
charged on the first day of the following quarter. Clients may terminate investment advisory
services obtained from LCM, without penalty, upon written notice within five (5) business days
after entering into the advisory agreement with LCM. After that time, the client is responsible
for any fees and charges incurred by the client from third parties as a result of maintaining the
account such as transaction fees for any securities transactions executed and account
maintenance or custodial fees. Thereafter, the client may terminate advisory services upon
written notice delivered to and received by LCM. Clients who terminate investment advisory
services during a quarter are charged a prorated advisory fee based on the date of LCM’s receipt
of client’s written notice to terminate. Any earned but unpaid fees are immediately due and
payable, and any prepaid and unearned fees will be immediately refunded.

Financial Planning – Financial planning services are charged in arrears through a fixed fee or
hourly arrangement as agreed upon between the client and Luna Capital Management, LLC. As
such, there will never be an instance where $1,200 or more in fees is charged six or more months
in advance. Hourly fees are generally charged when the scope of services cannot be determined
or if the services are limited to one meeting. Fixed fees are generally quoted to the client for
longer term consulting projects. Fees are negotiable and vary depending upon the complexity of
the client situation and services to be provided. Hourly fees range from $500 - $1,000 per hour,
depending on what services are provided and is negotiated between LCM and the client. Similar
financial planning services may be available elsewhere for a lower cost to the client. Fixed fees
for longer-term consulting projects range from $750 to $2,500 per project. An estimate for total
hours and charges is determined at the start of the advisory relationship.

Typically, clients will be invoiced monthly for all time spent by LCM as agreed upon by client or
upon completion of the services if less than a month. LCM will accept checks for payment.
Clients who wish to terminate the planning process prior to completion may do so with written

notice or by contacting Ronan Gaudario at (415) 513-5257. Upon receipt of written notification,
any earned fee will immediately become due and payable, and any prepaid and unearned fees
will be immediately refunded and completed portions of any documents will be delivered to the
client. A client may terminate an advisory agreement without being assessed any fees or
expenses or penalty within five (5) business days of its signing.

Additional Fees and Expenses

In addition to advisory fees paid to LCM as explained above, clients may pay custodial service,
account maintenance, transaction, and other fees associated with maintaining the account. These
fees vary by broker and/or custodian. Clients should ask LCM for details on transaction fees or
other custodial fees specific to their account, as these fees are not included in the annual advisory
fee. LCM does not share any portion of such fees. Additionally, for any mutual funds
purchased, the client may pay their proportionate share of the funds’ distribution, internal
management, investment advisory and administrative fees. Such fees are not shared with LCM
and are compensation to the fund manager. Clients are urged to read the mutual fund prospectus
prior to investing.

Mutual fund companies impose internal fees and expenses on clients. These fees are in addition
to the costs associated with the investment advisory services as described above. Complete
details of such internal expenses are specified and disclosed in each mutual fund company’s
prospectus. Clients are strongly advised to review the prospectus(es) prior to investing in such
securities.
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Types of Clients

LCM offers investment advisory services to individuals and high net worth individuals. There is
no minimum account size to open and maintain an advisory account.

Form ADV, Part 2A, Item 8

       Methods of Analysis, Investment Strategies, and Risk of Loss

LCM’s methods of analysis and investment strategies incorporate the client’s needs and
investment objectives, time horizon, and risk tolerance. LCM is not bound to a specific
investment strategy for the management of investment portfolios, but rather consider the risk
tolerance levels pre-determined gathered at the account opening, as well as on an on-going basis.
Examples of methodologies that our investment strategies may incorporate include:

Asset Allocation – Asset Allocation is a broad term used to define the process of selecting a mix
of asset classes and the efficient allocation of capital to those assets by matching rates of return
to a specified and quantifiable tolerance for risk.

Dollar-Cost Averaging – Dollar-cost averaging is the technique of buying a fixed dollar amount
of securities at regularly scheduled intervals, regardless of the price per share. This will
gradually, over time, decrease the average share price of the security. Dollar-cost averaging
lessens the risk of investing a large amount in a single investment at the wrong time.

Technical Analysis – involves studying past price patterns and trends in the financial markets to
predict the direction of both the overall market and specific stocks. The risk of market timing
based on technical analysis is that it may not accurately predict future price movements. Current
prices of securities may reflect all information known about the security and day to day changes
in market prices of securities may follow random patterns and may not be predictable with any
reliable degree of accuracy.

Long-Term Purchases – securities purchased with the expectation that the value of those
securities will grow over a relatively long period of time, generally greater than one year.

Short-Term Purchases – securities purchased with the expectation that they will be sold within a
relatively short period of time, generally less than one year, to take advantage of the securities’
short term price fluctuations.

Our strategies and investments may have unique and significant tax implications. Regardless of
your account size or other factors, we strongly recommend that you continuously consult with a
tax professional prior to and throughout the investing of your assets.

Investing in securities involves risk of loss that clients should be prepared to bear. Although we
manage your portfolio with strategies and in a manner consistent with your risk tolerances, there
can be no guarantee that our efforts will be successful. You should be prepared to bear the risk
of loss.

All investments involve the risk of loss, including (among other things) loss of principal, a
reduction in earnings (including interest, dividends, and other distributions), and the loss of
future earnings. These risks include market risk, interest rate risk, issuer risk, and general
economic risk. Regardless of the methods of analysis or strategies suggested for your particular
investment goals, you should carefully consider these risks, as they all bear risks.

LCM’s primary goal for investing is to help the client maintain purchasing power over the long
term. This may result in short term variability and loss of principal. Time horizon and risk
tolerance are key determinates of the proper asset allocation. LCM’s approach focuses on taking
appropriate risks for which clients are compensated (i.e. market risk) and seeking to limit or
eliminate risks that do not provide compensation over the long term (i.e. individual stock risk or
lack of portfolio risk).

Below are some more specific risks of investing:

Market Risk. The prices of securities in which clients invest may decline in response to certain
events taking place around the world, including those directly involving the companies whose
securities are owned by the client or an underlying fund; conditions affecting the general
economy; overall market changes; local, regional or global political, social or economic
instability; and currency, interest rate and commodity price fluctuations. Investors should have a
long-term perspective and be able to tolerate potentially sharp declines in market value.
Management Risk. LCM’s investment approach may fail to produce the intended results. If our
perception of the performance of a specific asset class or underlying fund is not realized in the
expected time frame, the overall performance of client’s portfolio may suffer.

Equity Risk. Equity securities tend to be more volatile than other investment choices. The value
of an individual mutual fund or ETF can be more volatile than the market as a whole. This
volatility affects the value of the client’s overall portfolio. Small- and mid-cap companies are
subject to additional risks. Smaller companies may experience greater volatility, higher failure
rates, more limited markets, product lines, financial resources, and less management experience
than larger companies. Smaller companies may also have a lower trading volume, which may

disproportionately affect their market price, tending to make them fall more in response to
selling pressure than is the case with larger companies.

Fixed Income Risk. The issuer of a fixed income security may not be able to make interest and
principal payments when due. Generally, the lower the credit rating of a security, the greater the
risk that the issuer will default on its obligation. If a rating agency gives a debt security a lower
rating, the value of the debt security will decline because investors will demand a higher rate of
return. As nominal interest rates rise, the value of fixed income securities is likely to decrease. A
nominal interest rate is the sum of a real interest rate and an expected inflation rate.
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